As the date for the finalization of the negotiations
for the Free Trade Area of the Americas approaches, it has become obvious
that a comprehensive and conceptual political debate is required on the
future model to which we aspire in the Hemisphere and on the most
appropriate integration models to achieve these goals. We therefore feel
that it is appropriate, on behalf of the Bolivarian Republic of Venezuela,
to contribute to this necessary process of collective reflection by
presenting an overall vision of the issues being negotiated in the FTAA
and how they impact the building of a pluralistic, democratic,
participative, equitable and environmentally sustainable society
throughout the Hemisphere.

In this document, we have incorporated issues addressed
in previous documents as well as others that we consider to be equally
substantive.

1. The role of the State, cultural options for
other ways of life, and liberalization policies.

One of the main challenges facing the countries of
Latin America and the Caribbean is to overcome the poverty and the
profound inequalities that make this region one of the most inequitable in
the world. We must also assume the challenges and respond to the demands
to recognize the multiplicity of the peoples, cultures and ways of life
that characterize our diverse and heterogeneous region. Any program for
Latin America and the Caribbean must, therefore, give priority to
overcoming poverty and inequalities; cultural recovery and strengthening
different ways of life; and establishing modalities for using resources
that enable us to build an environmentally sustainable future, in light of
the severe restrictions facing the world.

The region’s experience in recent decades suggests that
the liberalization policies formulated by the Washington Consensus are not
those that most favor growth. Nor is a market-oriented globalization model
the best guarantee for preserving and boosting multiple cultural
traditions or the biological and environmental diversity and wealth that
make life possible. During the sixties and the seventies, when development
and import substitution policies were being implemented, the region’s
average annual economic growth far exceeded average growth levels, from
the moment structural adjustment policies, liberalization initiatives and
outward-oriented growth models became widespread.

The concept underlying the FTAA negotiations has been
largely based on a strong and liberal cultural fundamentalism, as well as
on an ideological bias which, above all else, gives preference to the
market over any other type of social regulation or resource allocation
criteria. This concept does not take into account the history and rich
cultural diversity of our region, and ignores the ways in which the State
has intervened in all the historic experiences of capitalist development
that have been considered successful. State-market relations, as well as
the other social regulation modalities, and the weaving of the fabric of
society, which are all rooted in the diversity of cultural contexts, are
not issues that can be resolved once and for all, for all future
situations, on the basis of general theoretical or political assumptions.
The relevance of greater or lesser levels of regulation or social
intervention, and the diversity of responses emanating from the different
peoples and cultures are open issues that must be decided upon in the
context of constantly changing conditions. This has as much to do with the
political alternatives the electorate votes for on the basis of its
evaluation of the different programs proposed by the various candidates
and parties, as with the cultural options that define the ways of life of
the various peoples of the region. It would be difficult to speak of
political or cultural democracy if this were not the case. Liberalization
and structural adjustment policies cannot, therefore, be established as
rigid, long-term commitments. They would end up producing an
extraordinarily severe reduction in the future margins of democratic life.

The role of the State and public policies must
therefore be re-introduced as conditions without which it would be
impossible to achieve the desired goal of a pluralistic, equitable,
democratic and environmentally sustainable society.

It is equally urgent and essential to recognize,
protect and promote the multitude of forms of autonomous social
organization and management that are found throughout the Americas and are
based on the reciprocity, solidarity and autonomy.

Submitting all types of production to a one-dimensional
market-oriented logic and to productivity criteria defined by
international standards would irreversibly undermine the material bases
for reproducing our region’s wealth of cultural diversity.

This unilateral vision (that underpins the FTAA) of the
way of life that all the peoples of the Americas are supposed to aspire to
and of how they have to proceed in order to achieve it, runs directly
counter to the core guidelines of international human rights legislation,
as contained in the most representative legal instruments on the subject,
such as the International Covenant on Economic, Social and Cultural
Rights of the United Nations, and Convention (No. 169) concerning
Indigenous and Tribal Peoples in Independent Countries of the
International Labour Organization.

2. Services, and economic, social and cultural
rights. The public and the private sector.

One of the areas that would produce some of the more
profound transformations in our societies is services, as described in the
FTAA Chapter on Services. According to the logic of
mercantilization, these negotiations seek to open vast areas to private
investment, areas that until only recently were considered the province of
public services.

Guided by the goal of achieving the highest level of
deregulation and liberalization (read: privatization) possible of these
services, the negotiations agenda is extremely ambitious. This represents
a frontal attack on the economic and social rights the provision of such
services responds to. The concept of services, which defines the scope of
these agreements, is extremely broad. One of the versions of the FTAA
Chapter on Services defines services as follows:

the term “services” includes any service of any
sector, except services supplied in the exercise of governmental
authority;

“A service supplied in the exercise of governmental
authority” means any service which is supplied neither on a commercial
basis, nor in competition with one or more service suppliers.

This all-encompassing definition means that practically
all public services would be subjected to the “disciplines” of the
agreement, either now or in the future. At stake are core issues for both
democracy and human rights. The gradual—and irreversible—privatization of
public services would radically transform the public sector. Demands for
access to health care, education, water, transportation, and social
security services would cease to be viewed as social and economic rights
in the public domain, and would instead be structured as private
contractual relationships between commercial enterprises and paying
customers. Once these services have been separated and privatized, they
can no longer be viewed or claimed as rights.2

In Venezuela, social, economic, and cultural rights are
not only international commitments; they are rights that are guaranteed by
the Constitution. It is therefore impossible to "ensure that its laws,
regulations, and administrative procedures are in conformity with the
obligations assumed under the FTAA Agreement”, without making significant
amendments to the 1999 Constitution.

3. Social and environmental issues

The Quito Ministerial Declaration reiterates that the
“negotiation of the FTAA will take into account the broad social and
economic agenda contained in the Miami, Santiago and Quebec City
Declarations and Plans of Action with a view to contributing to raising
living standards, increasing employment, improving the working conditions
of all people in the Americas, improving the levels of health and
education and better protecting the environment.” However, as indicated
previously, a huge imbalance exists between the trade-related commitments
and disciplines set forth in the text of the different chapters of the
Agreement and the commitments assumed in the realm of human, labor,
cultural and environmental rights. Similarly, there is a total imbalance
between the rights of investors and the rights of States.

All of the countries participating in the FTAA are
signatories to a vast array of international agreements and treaties, the
express purpose of which is to protect human rights and the environment.
As the experience of the North America Free Trade Agreement has already
shown, the commitments assumed by a country in a new bilateral,
multilateral or global treaty or agreement can occasionally conflict with,
or contradict, previously signed and ratified treaties or agreements. The
FTAA is not an agreement on human, labor, cultural or environmental
rights. Nonetheless, a guarantee must be provided that the commitments
assumed through the signing of this Agreement will not jeopardize any
commitments previously undertaken by our countries under other treaties.
This is particularly worrisome, considering that free trade agreements,
such as NAFTA, have much more effective mechanisms in place to ensure
compliance—based on strict sanctions— than those of the agreements and
treaties on human, labor, cultural and environmental rights. This capacity
to ensure compliance with norms is also characteristic of the World Trade
Organization (WTO).

4. Agriculture: much more than a goods-producing
sector

As reasserted at the WTO meeting in Cancun,
international trade negotiations are proceeding under profoundly unequal
conditions. While the main industrialized countries of the North demand
the comprehensive liberalization of the economies of the countries of the
South, the former have maintained strong protection policies in those
sectors of their economies in which the countries of the South could have
a greater capacity to compete in the international market. This is the
case with textiles and, most particularly, with agriculture. In the
context of the FTAA, many countries of the region have justifiably been
stating that it is impossible to continue making significant progress in
many areas of the negotiations if the United States is not willing to
reconsider its domestic support policies for agricultural production.

Some countries spend tens of millions of dollars every
year to prop up their agricultural production and exports and thereby
cause significant price distortions in world agricultural products
markets. These price distortions block or hinder effective access to the
markets of these countries, even with the elimination of tariff barriers.
It also means these countries compete unfairly in the markets for Latin
America and the Caribbean’s produce by taking away markets in third
countries for agricultural products which might otherwise be exported or
exported with greater benefits. Our countries lack the financial resources
of developed countries to support agriculture; what we have are policy
tools to mitigate the adverse effects of international price distortions,
tools that we have been asked to eliminate in the market access
negotiations.

The San José Ministerial Declaration of 1998
clearly established that the objectives of the negotiations were, among
others, “to eliminate agricultural export subsidies affecting trade in the
Hemisphere” and “to identify other trade-distorting practices for
agricultural products, including those that have an effect equivalent to
agriculture export subsidies, and bring them under greater discipline.”

The FTAA Ministers also reached a consensus, on that
same occasion, that negotiations would begin simultaneously in all issue
areas. The commencement, holding and outcome of the FTAA negotiations
would be treated as parts of a single undertaking that embodies the rights
and obligations mutually agreed upon.

Since the launch of the negotiation of the texts for
the draft Agreement, however, some countries expressed their reticence to
eliminate agricultural export subsidies and domestic aid that distort
trade and production of agricultural products, including measures that
have an effect equivalent to export subsidies. This massive domestic aid
further accentuates the profound imbalances characterizing economic
relations throughout the region. At the Quito Ministerial Meeting, all of
the countries recognized “the importance of agriculture for the economies
of the region, the integral and non-discriminatory treatment of which in
the FTAA negotiations will contribute to generating employment, reducing
poverty and fostering social stability. We reaffirm the hemispheric
commitment to the elimination of export subsidies affecting trade in
agricultural products in the Hemisphere and to the development of
disciplines to be adopted for the treatment of all the other practices
that distort trade in agricultural products, including those which have an
equivalent effect to agricultural export subsidies, and to make
substantive progress in the market access negotiations.” Specifically, the
countries indicated “that our respective evaluation by country or group of
countries, of the results in the market access negotiations in agriculture
in the FTAA will depend on the progress we can reach in other subjects
that are part of the agriculture agenda.”

The poverty and marginalization of our peoples is, to a
large extent, concentrated in rural areas whose populations subsist on
agricultural or agriculture-related activities. Ultimately, this segment
of the population is the hardest hit by the inherent imbalance in the
agricultural negotiatons and would be even more so if the issues that are
most harmful to them are not addressed in the negotiations.

The demand to reduce protectionism and the huge
subsidies granted by the main industrialized countries cannot, however,
translate into a generalized demand for the liberalization of trade in
agricultural products. For many Latin American and Caribbean countries,
agriculture is crucial to the survival of the nation itself. Living
conditions for millions of campesinos and indigenous peoples would
suffer catastrophically if imports of agricultural goods were to flood
their markets, even if these were not subsidized. Agricultural production
is more than the mere production of a good. Rather, it is a way of life.
It is the material basis for preserving cultural options, it is a form of
land occupation, it defines how society interacts with nature, and it is
directly related to the critical issues of food security and sovereignty.
Consequently, agriculture cannot be treated like any other economic
activity or product.

5. Intellectual property rights

Access to and enjoyment of the fruits of scientific and
technological endeavor are clearly recognized and codified as human
rights. Article 27 of the Universal Declaration of Human Rights
states:

Everyone has the right freely to participate in the
cultural life of the community, to enjoy the arts and to share in
scientific advancement and its benefits.

Everyone has the right to the protection of the
moral and material interests resulting from any scientific, literary
or artistic production of which he is the author.

A balance is struck between society's right to have
access to the results of "scientific advancement" and the right of the
creator to benefit from his work. As an expression of the increasing
prevalence of commercial law, due to multilateral, regional, and bilateral
negotiations, this balance is entirely upset in the WTO Agreement on
Trade-Related Aspects of Intellectual Property Rights and in the FTAA
Chapter on Intellectual Property Rights. Appealing to what was
referred to as "trade-related issues", a broad protection regime has been
set up to protect intellectual property in each of its main areas. These
negotiations were conducted between the countries of the North and the
South under extremely asymmetrical conditions. Despite initial resistance
from many countries of the South, the countries of the North managed to
impose a mandatory regime and global protection for intellectual property
in accordance with their own demands, and based on the proposals made by
transnational pharmaceutical companies. The corresponding texts define the
results of scientific-technological activity as merchandise, a good for
whose use its owner is entitled to charge the rest of society. The
modalities for the registration of authorship of knowledge that
characterize the industrial model, i.e., patents, obtain full
protection as private property. The other knowledge, collective,
campesino, traditional, and indigenous modalities, etc., in failing to
meet the specific authorship, novelty or industrial application criteria,
lack this type of protection. The areas in which the countries of the
North and their companies have solid advantages, their control of a very
high proportion of all industrial patents, is rigorously protected.
Conversely, the areas in which the countries of the South have advantages,
the knowledge of their campesinos, as well as their traditional
knowledge and biodiversity, is to all intents and purposes left
unprotected.

There has been a huge expansion in what can be
considered patentable, thereby blurring the previously-existing dividing
line between an invention (patentable) and a discovery
(non-patentable). Similarly, as a result of the transformations in the
field of technology, particularly, new developments in biotechnology, and
in response to the demands of this industry, a new and vast field has
opened up for intellectual property: intellectual property of life
forms.

These conceptual and doctrinal shifts in intellectual
property have been accompanied by the creation of new, national and
transnational, juridical and institutional instruments to protect it.

As a result of the monopolistic rights accorded by
TRIPS, pharmaceutical companies can eliminate competition and charge
prices that exceed the buying power of millions of people. According to
various studies, not only will significant price increases occur as a
result of the introduction of patents, but the level of consumption will
also drop sharply. Broad swaths of the population will thus be unable to
access commercial medications. In addition, medium- and small-sized
pharmaceutical companies will tend towards bankruptcy and large
transnationals will tend to increase their monopolistic control.

The establishment of patents on various life forms and
the appropriation/expropriation of campesino and community knowledge by
large transnationals producing seeds and agrochemicals are rapidly
changing rural production patterns on a global scale. Campesinos are
becoming increasingly less autonomous and more dependent on the purchase
of costly inputs from transnationals.

The “free trade” increasingly imposed by transnationals
on campesinos around the world in causing reduced genetic variety in many
of the main food crops. This reduction in genetic diversity, associated
with an engineering–oriented vision of agriculture, based on an extreme
type of industrial control in each phase of the production process—with
genetically manipulated seeds and the intensive use of
agrochemicals—drastically reduces the self-adaptive and regenerative
capacity of ecosystems. In few areas of international relations are the
opposing interests of transnationals that hold the majority of patents and
the basic human rights of the poor majorities in the South demonstrated so
clearly.

Against this dramatic backdrop, Venezuela proposes that
the new ways found for structuring and consolidating intellectual property
agreements must not pose any threat to the standard of living of the
majority of the world’s population, to the survival possibilities of
peoples and communities who throughout the world defend the right to
alternative cultural options other than total commercialization, or to the
right of our peoples to have access to quality medicines and food at low
prices.

6. The mandate for transparency in the negotiations
and democratic participation

Time and again, presidential and ministerial
declarations on the FTAA have established mandates and commitments
regarding transparency in the negotiation process. Transparency in the
negotiating process is a condition without which civil society
participation in the follow-up to FTAA negotiations will be impossible.
This transparency, nevertheless, has been extremely limited to date. Only
after strong pressure by social organizations from all over the region was
the first draft of the texts made public, in June 2001, after several
years of negotiation. The second draft was made public in November 2002.
These draft texts provide only limited material for any debate of what is
happening in the FTAA negotiations. The abundance of bracketed text and
the impossibility of determining the party that introduced the brackets,
means that it is also impossible for the people of each country to discern
their respective government’s negotiating positions. This endows the
government representatives at the negotiating tables with broad
discretionary powers and, in effect, means that their positions remain
secret which, in turn, makes any possibility of an informed, democratic
public debate impossible.

Only through a negotiation process that is in effect
transparent as far as society as a whole, the business sector, workers,
and indigenous, women, cultural, and environmental organizations,
political parties, parliament, and the press are concerned, will we be
able to claim that we are moving towards what could be termed a
‘democratic’ integration process. In the case of Venezuela, as provided
for in Article 73 of its Constitution, Referendums on Bills and National
Issues, the Government would have to carry out a referendum on the FTAA
before approving or ratifying the corresponding Agreement.

Increased transparency, full access for societies to
all the information, and public debate on the FTAA negotiations will
necessarily require other timetables. These are the necessary costs of
democracy. The accelerated process of the meetings currently under way and
the pressure to conclude these negotiations by the end of 2004 at the
latest, make it impossible to ensure transparency and the possibility of
social sectors and society as a whole being consulted before making
decisions of such profound consequences as those involved in the current
FTAA draft Agreement.

The main reasons for requiring a democratic,
transparent process, access to information, and the right to participate
in the FTAA decision-making process is based fundamentally on the fact
that the FTAA Agreement is much more than a narrow trade agreement. On the
contrary, it encompasses a wide spectrum of collective life in all its
institutional, political, social, and cultural dimensions. This broad
coverage is defined in precise terms in one of the General Guidelines
issued at the Fourth Trade Ministerial of the Americas.

All countries shall ensure that their laws,
regulations, and administrative procedures conform to their obligations
under the FTAA agreement.

In other words, what is being required is the
politico-institutional redesign of State structure. In many instances, and
Venezuela is one such case, substantial constitutional changes would be
needed for this to take place. As this is the case, negotiations cannot
continue as if these were solely trade negotiations involving only experts
and specialists in the various areas of commercial and international law.
Democratic negotiations need to include, in an effective manner, all
sectors of the population continent-wide because every sector will be
affected to some extent by the agreements currently under negotiation.

7. Legal inequalities and free movement of persons

Historically, according to liberal tradition, and in
spite of the obvious differences that exist in the distribution of power
and resources among the citizens of a representative democracy, everyone
is equal within the political system (one person, one vote) and equal in
the eyes of the law, which is supposed to be blind to economic, political,
ethnic and cultural differences. The rules of the FTAA, however, establish
distinct inequalities between the rights of different types of subjects.
The first instance of inequality is the situation created in each country
between national investors and investors from other countries that form
part of the Agreement. Whereas public rules and regulations cannot
establish conditions that are more advantageous for national investors
than for foreign ones, the contrary is to be completely legitimate.
Moreover, the Agreement establishes a fundamental difference that favors
foreign investors by allowing them to use extranational dispute settlement
mechanisms to question or request compensation rulings, for rules, laws or
public policies of a country which, in their view, may affect their
"expected profit." Investors from the country in question are, however,
denied this possibility. Equally significant is the legal inequality
established in the text between ordinary persons who, to cross borders,
must abide by increasingly stringent regulations and limitations, and a
special class of persons—business people—who will be fully entitled
to enter countries where their businesses carry out economic activities.

When the mobility of enterprises or capital increases
yet the movement of persons is restricted or repressed, workers’
negotiating capacity and their ability to demand better working and pay
conditions are severely constrained. A company’s mere threat to move
elsewhere could severely curtail wage earners’ ability to organize and
make demands. Hence, a trade agreement that is truly beneficial to all
countries and to all social sectors would require provisions for the
free movement of persons, as is the case in the European Union.

8. Inequalities in the levels of development and
Structural Convergence Funds

The negotiations for the Free Trade Area of the
Americas began against a backdrop of abysmal differences not only in the
size of the economies but also of extraordinary differences in the levels
of development. One of the main objectives of a successful integration
project—as seen in the experience of the European Union—should be to take
concrete steps towards significantly reducing the vast inequalities that
exist from the outset. Firm commitments, backed by enforcement procedures,
must therefore be established for the Agreement to effectively reduce
these inequalities.

The profound inequalities existing when the FTAA
negotiations began have been repeatedly recognized in the documents of the
Presidential Summits and Ministerial Meetings. The Quito Ministerial
Declaration states:

We reaffirm our commitment to take into account in
designing the FTAA, the differences in levels of development and size
of economies in the Hemisphere, in order to ensure that these
economies participate fully in the building of, and benefits resulting
from, the Agreement.

The measures that have been discussed under
preferential treatment or small economies fail to offer
guidance on policies capable of effectively contributing to a significant
reduction in those profound disparities. This involves not only small and
large economies, but also very different economic structures.

The steps to which the most attention has been paid
focus on strengthening countries’ technical capacity to take part in the
FTAA negations, but as of yet no decisions have been made on the urgent
steps needed to reduce and eliminate the profound inequalities among our
countries. The Consultative Group on Smaller Economies has
conducted a systematic survey on the “Report of the Trade Negotiations
Committee on the Results of the Progress Achieved in Relation to the
Treatment of Differences in the Levels of Development and Size of
Economies in Each of the Negotiating Groups”3 This meticulous report
illustrates how little progress has been made in adequately responding to
the demands for special and differential treatment for the smallest
economies and for the least developed countries, regions, and activities.
Most references to these matters limit “preferential treatment" to
technical assistance for adjustment processes or to extending deadlines to
comply with the disciplines set out in the Agreement. Nevertheless, to
date, not even these modest responses have been agreed on. In each drafts,
each one of these proposals is still bracketed.

If the actions needed to improve social and production
conditions are not taken, highly unequal countries would be treated as
equals and forced to compete under the same rules, despite their
underdevelopment and weaknesses.

Equal treatment for profoundly unequal economies can
only favor the strongest at the expense of the weakest. Neither technical
assistance to allow countries to adapt nor periods of a few years can
address these problems. This is all the more worrisome, since the
definition of the "General Objectives and Principles"4 of the negotiations
on the Agreement sets forth that the “rights and obligations of the FTAA
shall be shared by all the countries.” This implies a reciprocity
principle requirement among highly unequal economies and economic
agents, which is in outright contradiction with longstanding norms of the
inter-American system.5

To move toward reducing these profound inequalities, we
must face this challenge and assume firm commitments, which will
necessarily entail a significant transfer of resources from the wealthiest
to the poorest countries. In our opinion, an integration project can be an
opportunity for all, if and only if the leading powers of the Hemisphere
share the political, economic, and financial costs of opening spaces for
production in the weakest countries. Hence, the creation of Structural
Convergence Funds intended to finance infrastructure and services projects
in order to reduce the asymmetries and inequalities among countries is an
essential condition for preventing a free trade area from becoming a space
with some winners and many losers.

At the Puebla TNC, held 8-11 April 2003, Venezuela
submitted a document calling for discussions on the viability and
suitability of including the topic of Structural Convergence Funds. The
purpose of such funds would be to significantly reduce asymmetries in the
levels of development among nations and production sectors. To this end,
this mechanism would have precise social and economic goals and monitoring
mechanisms and would remain in effect for a specific length of time.

The FTAA's treatment of differences in the levels of
development and size of the participating economies, in addition to being
envisioned—for the reasons given above—as an issue of the highest
priority, should include:

The creation of instruments within the FTAA that
will allow developing countries to become more competitive and improve
the conditions under which they produce, while reducing the
disparities that characterize their internal economic operation and
the substantial gaps between them and the large, developed economies
of the Hemisphere.

A clear definition of the economies that will
receive special and differential treatment.

The identification of special and
differential treatment not only toward all the economies but also
within each one of them, so that this treatment may be aimed at the
regions and sectors that most need it. The resources marshalled to
address disparities would thus be directly linked to the
intra-national spheres that they will target, thereby ensuring
efficiency and transparency as well as a reduction in administrative
obstacles associated with the use of these resources from the
aforementioned mechanisms.

Although the creation of the Consultative Group on
Smaller Economies (CGSE), in 1998, and the Hemispheric Cooperation Program
(HCP)6, in 2002, stemmed from the existence of profound inequalities in
the FTAA zone, these measures are clearly insufficient for properly
addressing the problem, foremost because, to date, special and
differential treatment has not been extended to economies which, although
not among the "smallest,” are characterized by a low degree of average
development or by the existence of regions or sectors that require special
support in order to successfully compete with the Hemispheric free trade
that will be created through the FTAA.

More than 24 countries of the Hemisphere recognize the
limitations of these proposals and are demanding a change in the way
assistance is provided to developing countries. A group of delegations has
been raising this issue since the negotiations began and insists on the
need for a Regional Integration Fund; other countries are requesting a
fund to support the restructuring of businesses and the reorientation of
production; and some have proposed the creation of a Compensation Fund.

Venezuela has suggested a series of possible financing
sources for these Structural Convergence Funds, such as:
foreign-debt forgiveness, withholding a percentage of outstanding
foreign-debt payments for the funds, a tax on speculative foreign-exchange
transactions, contributions from foreign investors and donations from
international agencies--in a bid to trade debt for welfare and efficient
and fair redistribution mechanisms.

9. The FTAA: A Threat to States’ Legal Sovereignty?

Potential conflicts between the FTAA’s
juridical-regulatory guidelines and the doctrine of the sovereignty of
States needs to be discussed thoroughly. The notion of the FTAA as an
instrument for the legal-political transformation of each country is
clearly defined in one of the guiding principles of the entire negotiating
process.

All countries shall ensure that their laws,
regulations and administrative procedures conform to their obligations
under the FTAA agreement.7

The text repeatedly sets forth that the enforcement of
a country’s laws or rules may not be used to justify a failure to comply
with the Agreement's obligations or disciplines. Among the many
examples in the FTAA drafts, we can cite the following from the Chapter on
Investmentregarding the commitments to be assumed by the
countries:

This Chapter applies to the entire territory of the
Parties and to any level or order of government regardless of any
inconsistent measure that may exist in legislation at those levels or
orders of government. (Article 1.7. Scope of Application).

The text continues:

The provisions of paragraphs . . . shall not be
construed to prevent any Party from adopting or maintaining measures,
including environmental measures that are . . . necessary to ensure
compliance with laws and regulations that are not inconsistent with
the provisions of this Agreement. (Article 7.4. Performance
Requirements).

That is, a government may take steps to enforce its
domestic laws and regulations only when such laws and regulations are
compatible with the commitments agreed on in the FTAA text.

Of equally profound consequences for the legal order of
each of the countries of the Hemisphere is the manner in which foreign
investors are granted the right to use the Agreement's dispute-resolution
mechanisms to challenge rules, laws, regulations or public policies that
may in some way affect their "expected profit." The experience of the
North America Free Trade Agreement shows that this right might put severe
constraints on governments’ capacity to establish or enforce environmental
or public-health rules or regulations and thus limit their ability to
implement sovereign public policies in those areas.

These profound restrictions on the exercise of national
sovereignty would affect every country of the continent, and they would
directly contradict the basic legal tenets on which the 1999 Constitution
of the Bolivarian Republic of Venezuela rests.

Caracas, November 2003

1 Official document of the
Bolivarian Republic of Venezuela presented at the Miami Ministerial
Meeting, November 2003.

2 The World Bank, together
with the International Monetary Fund, has been one of the main forces
behind the privatization of public services throughout South America.
Its most recent report on world development, however, notes that
services are a social responsibility, that the privatization thereof
does not guarantee that the poor will have access to these services and
that these cannot be abandoned by the public sector. World Bank, World
Development Report 2004, Washington, 2003.

5 The Buenos Aires Protocol
is one of the main instruments of the human rights regime in the
Americas. There is a stark contradiction between this manner of
conceiving reciprocity and the commitments currently included in this
agreement. “Article 37. The Member States, recognizing the close
interdependence between foreign trade and economic and social
development, should make individual and united efforts to bring about
the following: a) Reduction or elimination, by importing countries, of
tariff and non-tariff barriers that affect the exports of the Members of
the Organization, except when such barriers are applied in order to
diversify the economic structure, to speed up the development of the
less-developed Member States or to intensify their process of economic
integration, or when they are related to national security or to the
needs for economic balance.” “Article 38. The Member States reaffirm the
principle that when the more-developed countries grant concessions in
international trade agreements that lower or eliminate tariffs or other
barriers to foreign trade so that they benefit the less-developed
countries, they should not expect reciprocal concessions from those
countries that are incompatible with their economic development,
financial, and trade needs.”

6 This group was created at the Fourth Trade Ministerial Meeting, in San
José, Costa Rica, 19 March 1998. As set forth in paragraph 13 of the
Declaration, its functions are to: a) follow the FTAA process, keeping
under review the concerns and interests of the smaller economies; b)
bring to the attention of the TNC the issues of concern to the smaller
economies and make recommendations to address these issues.